• by Wendy Davis , Staff Writer @wendyndavis, June 22, 2010

Officials in Europe and the U.S. indicated this week that online ad companies that track people online could soon face new restrictions.

In Europe, Viviane Reding, vice-president of the European Commission responsible for Justice, Fundamental Rights and Citizenship, called for updated privacy rules for online behavioral advertising.

"Online operators use behavioral advertising to create profiles of users' online activities to better target them with advertising," she said on Tuesday. "But our data protection principles say that people's emails and online activity can only be used this way if individuals are fully aware of the use and they do not object. So we need rules that make the obligations for respecting privacy rights very clear."

While she didn't come out with any specific proposals regarding behavioral targeting, Reding did say that there's a need for "more clarity about what 'users' consent' means in practice."

Regulators in the U.S. also are struggling to figure out how companies should obtain users' consent to behavioral targeting. In the past, online ad companies typically notified users about targeting in privacy policies and allowed them to opt out via a link in the policy.

But critics -- including government representatives -- increasingly say that privacy policies are too dense to adequately inform users about targeting. "We've put too much burden on the consumers to understand these policies," Federal Trade Commission senior attorney Kathryn Ratte said on Monday, Cnet reports. "To compare the privacy policies of two companies is an almost impossible task."

Some privacy advocates additionally say that companies should obtain users' explicit, opt-in consent before targeting them. For now, however, lawmakers in the U.S. at least don't seem prepared to move in that direction. A draft bill floated recently by Rep. Rick Boucher would require online ad networks to notify people about targeting and obtain their consent, but permits opt-out consent as long as companies allow users to view and edit their marketing profiles.